It’s possible you are an outlier, but they are catering to the masses.
First, let’s clarify the difference between Theory vs Law: theory explains how and why something happens, Law explains what happens. Theory will never become a law with more evidence (hypothesis is the thing that is basically an educated guess, though most people use the word “theory” when they really mean hypothesis/guess/opinion)
The .99 thing could almost be described as a “Law” by these definitions because A LOT of sales research has been done on this issue and overwhelmingly the result has always indicated WHAT HAPPENS…Sales increase when they do this. That’s pretty much why everyone does it.
As for HOW and WHY this is observed, well that’s the theory side of it, and that is kind of up for debate to some degree. It appears that customers are much more swayed by the most significant first digits of a price, and sometimes the very last digit. Companies aren’t setting prices that way because they are GUESSING more people will buy it if they do that, they are doing so because of sales research and tests that have proven sales increase dramatically when they do that. To my knowledge, the first tests on this were conducted as back as the 1930’s and hundreds of tests and data crunches have been conducted ever since proving it overwhelmingly for decades with very few exceptions/outliers. Many studies have shown a difference of one to two cents increasing sales as much as 222% when it drops earlier digits to a new lower number.
In general there are significantly more sales when you show the price with a xx.99 instead of rounding up the extra 0.01. A lot of research has tried to figure out WHY that is, and that “WHY” is up for debate…but the result itself is nearly indisputable after hundreds of studies and crunching of absurd amounts of data testing it out.
Again, there are outliers, for example in certain industries, $1 even and $5 even actually sell more often than 1 cent less, and sometimes certain people have a stronger deviant aversion to uneven numbers (deviant compared to the vast majority of the population) than they have positive attraction to a slightly lower first digits of a price like most people in tests. It’s possible that you are one of those pricing outliers upon whom this doesn’t make a difference or may even backfire with. But companies look at this way. If they round up to .00 to appease less than 1% extra sales from the outlier people, they will LOSE as much as a couple hundred percent in sales for all the tons of people who otherwise might’ve purchased it because that sales and marketing technique works on the majority of people in our society. It makes no sense to round up to even numbers if it is going to reduce your overall sales. For the most part, customers aren’t rational, they’re emotional…and for whatever reason, in groups they are overall swayed significantly more by the earlier digits than the latter ones.
Then there is the anchoring technique…saying that the regular price is way higher, but rarely to never actually selling it at that rate, and convincing everyone they’re getting some kind of deal. People who would’ve never agreed or even considered it now get it because they first got anchored in at a high rate and now see it as a good decision.
I can say that in some of my businesses we’ve experimented with this and done data on it. We even did a hybrid test incorporating part of what you suggest. For example, we’d start by offering some people $40.00/hr for certain services, then others $39.00, and that 1 dollar made a HUGE increase in sales and closure despite it only being an insignificant 2.5% difference, a 3 looks way less than a 4 to start with, so our sales difference was huge.
Then we add anchoring to that. Maybe we had been doing a lot of services in the twenty something dollars per hour range and now we want to increase by 50-100%…so maybe test out by starting to tell people that the standard rate is something like $50/hr but we’ll go to $39/hr for various reasons and suddenly everyone wants to do more business, both new customers and previous customers.
Again, there is the WHAT, which has been pretty indisputably demonstrated for almost 100 years now with massive amounts of data and tests and research…the WHAT is pretty solid, and that’s why everyone complies to it…they get more sales. The how and why it happens that way is somewhat debatable. And there are definitely exceptions and outliers…but it’s a smart business move unless you can prove a particular outlier or exception far outweighs the standard outcome.
But to each their own…it’s just that most businesses are in it to maximize profits based on the greatest amount of people.
